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Internationalizing Like China

Author

Listed:
  • Christopher Clayton
  • Amanda Dos Santos
  • Matteo Maggiori
  • Jesse Schreger

Abstract

We empirically characterize how China is internationalizing its bond market by staggering the entry of different types of foreign investors into its domestic market and propose a dynamic reputation model to explain this strategy. Our framework rationalizes China’s strategy as trying to build credibility as a safe issuer while reducing the cost of capital flight. We use our framework to shed light on China’s response to episodes of capital outflows.

Suggested Citation

  • Christopher Clayton & Amanda Dos Santos & Matteo Maggiori & Jesse Schreger, 2022. "Internationalizing Like China," NBER Working Papers 30336, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30336
    Note: AP CF EFG IFM ITI ME POL
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    Citations

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    Cited by:

    1. Luca Fantacci & Lucio Gobbi & Dario Luciani, 2022. "Bene pubblico globale o arma finanziaria? L'egemonia del dollaro alla prova delle sanzioni (Global public good or financial weapon? Dollar hegemony to the test of sanctions)," Moneta e Credito, Economia civile, vol. 75(298), pages 123-147.
    2. Kai Arvai & Nuno Coimbra, 2023. "Privilege Lost? The Rise and Fall of a Dominant Global Currency," Working papers 932, Banque de France.
    3. Yang, Bohan & Wang, Bin, 2024. "The time-varying U.S. treasury bond demand elasticity," Economics Letters, Elsevier, vol. 241(C).
    4. Gelpern, Anna & Haddad, Omar & Horn, Sebastian & Kintzinger, Paulina & Parks, Bradley & Trebesch, Christoph, 2025. "How China collateralizes," Kiel Working Papers 2293, Kiel Institute for the World Economy.
    5. Colin Weiss, 2022. "Geopolitics and the U.S. Dollar's Future as a Reserve Currency," International Finance Discussion Papers 1359, Board of Governors of the Federal Reserve System (U.S.).
    6. Gerding, Felix & Hartley, Jonathan S., 2024. "De-dollarization? Not so fast," Economics Letters, Elsevier, vol. 238(C).
    7. Juan J. Cortina & Maria Soledad Martinez Peria & Sergio L. Schmukler & Jasmine Xiao, 2024. "The Internationalization of China’s Equity Markets," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 72(2), pages 554-610, June.
    8. Cheng, Feiyang & Gao, Haoyu & Pan, Xiaofei & Qian, Meijun & Zhou, Qing (Clara), 2025. "China's debt market: Evolution, regulation, and global integration," Pacific-Basin Finance Journal, Elsevier, vol. 91(C).
    9. Barry Eichengreen & Camille Macaire & Arnaud Mehl & Eric Monnet & Alain Naef, 2024. "Currency internationalization with Chinese characteristics: Is capital‐account convertibility required for the renminbi to acquire reserve‐currency status?," International Finance, Wiley Blackwell, vol. 27(2), pages 102-128, August.
    10. Castells-Jauregui, Madalen & Kuvshinov, Dmitry & Richter, Björn & Vanasco, Victoria, 2025. "Foreign demand for safety and macroeconomic instability," Working Paper Series 3126, European Central Bank.
    11. Zucker-Marques, Marina, 2025. "Currency Internationalization, payment infrastructures and central banks: An institutional analysis of renminbi internationalization," Research in International Business and Finance, Elsevier, vol. 73(PA).

    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • F2 - International Economics - - International Factor Movements and International Business
    • F3 - International Economics - - International Finance

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